The Niger Delta remains as important as ever for Shell. While it has cut onshore oil production and sold some onshore assets, it continues to invest in others. In fact, onshore production has risen in recent years as a share of Shell’s output in Nigeria, an analysis of company data over the past decade shows.
Much of the increase comes from less polluting gas, used mainly in power generation, which Shell thinks will be key to the transition to lower carbon energy. Gas made up 70 percent of onshore production in 2017, up from 47 percent in 2008.
The company still controls thousands of miles of pipelines connecting inland fields to coastal terminals through its subsidiary, Shell Petroleum Development Co of Nigeria (SPDC). SPDC has sold 10 of the 27 field licenses in the Delta it held in 2010, mostly to local companies. It has applied to renew the remaining licenses, which expire next year.
It has also begun to shift its gaze to offshore production. Offshore operations are an attractive alternative to the Delta in many ways. The Bonga field 75 miles off the coast is one of Shell’s prized assets since starting up in 2005. Shell and its partners will also decide next year on whether to develop a new offshore field, Bonga Southwest.